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Sally Smith decided to start a sea shell business organized as a corporation. Her initial investment in the business consisted of $10,000 in cash in exchange for common stock. Record this transaction in the accounting equation of the new business by: Multiple choice question. increasing Cash; increasing Expenses. increasing Cash; increasing Common Stock increasing Accounts Payable; increasing Revenues. decreasing Cash; increasing Common Stock.

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This investment made by Sally Smith will be recorded as increasing Cash; increasing Common Stock.

Recording the transaction

  • The amount was paid to acquire common stock so the Common stock account will increase.
  • The cash will then bring money into the business so the Cash account will increase as well.

The Cash account is an asset so this increase will be debited as other increases in assets are. The Common stock account will be credited as increases to capital are credited.

In conclusion, option B is correct.

Find out more on recording stock at https://brainly.com/question/25562729.

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